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The number of exits achieved by private equity (PE) firms in Africa reached its highest level in 2016, according to a report by the African Venture Capital Association (AVCA) and Ernst and Young (EY). The report, released on Tuesday, shows that PE exits reached 48 in 2016, continuing the consistent year-on-year increase over the last five years and the highest recorded level since 2007.

In terms of the exit route, the report says a significant uptick in sales to PE and other financial buyers occurred in 2016 – reaching 17 exits, compared to seven exits in 2015 – indicating a maturing and more competitive African PE industry.

However, exits via trade buyers – i.e. buyers in the same industry as the acquired firms – remained the dominant form of PE exits, with 24 exits in 2016, compared to 23 exits a year earlier. There was a marked decline in management buyouts (MBOs) and private sales during the year under review, the report says.

“The fifth Annual EY/AVCA Exit Study once again provides crucial information for PE firms when considering exits,” said Enitan Obasanjo-Adeleye, Director of Research at AVCA. “The PE exits record high illustrates the continued success of the industry and signals its resilience in spite of opposing macroeconomic issues facing some African countries.”

A regional breakdown of PE exits shows that Southern Africa – mostly dominated by South Africa – accounted for 46 percent of exits in 2016. Exits in West Africa – dominated by Nigerian and Ghana – accounted for 25 percent of total exits after a slowdown in the previous year.

North African exits increased to its highest levels in 2016, accounting for 25 percent of tests. Exits in East Africa dipped to 4 percent of total exits compared to 11 percent a year earlier. Central African exits remained flat at 0 percent in 2016 – same as in the previous year.

Over the last 10 years, from 2007 to 2016, the top five countries accounted for 70 percent of PE exits. They are South Africa (42 percent), Nigeria (9 percent), Egypt (9 percent), Kenya (6 percent), and Ghana (5 percent).

According to the report, the number of PE firms achieving exits in 2016 increased slightly to a new high of 31 (compared to 30 in 2015), indicating that the African PE sector continues to develop despite recent economic headwinds impacting a number of African economies.

The sectors attracting the highest number of PE exits between 2007 and 2016 were financial services, industrials, consumer goods and services, and telecoms and media. Exits from the healthcare and industrials sectors continued to increase during the period.

In 2016, Satya Capital exited from Hygeia Nigeria when the International Finance Corporation led a consortium of investors to invest $66.8 million in the healthcare company. Also last year, Helios Investment Partners exited from Helios Towers Nigeria (HTN) after IHS Towers, Africa’s leading telecoms infrastructure firm, acquired 100 percent of HTN from a group of shareholders.

Overall, the report stated that fintech, consumer goods and services, education, healthcare and energy sectors are some of the key sectors of interest to investors.

The report also set out ten key considerations for delivering better exits and enhancing value creation. These include: more rigorous portfolio reviews, more time and focus on exit planning, using an independent exit committee, timing in light of macro and other market uncertainties, and developing scale that is interesting to strategic investors.

“Private equity investors are now creating and preserving more value in the companies they own and operate in Africa,” said Graham Stokoe, Africa Private Equity Leader at EY. “With better preparation for exits, the PE industry in Africa is set to flourish even further over the next decade.”